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Does Austral Gold Limited's (ASX:AGD) CEO Pay Matter?

Simply Wall St

Stabro Kasaneva has been the CEO of Austral Gold Limited (ASX:AGD) since 2016. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Austral Gold

How Does Stabro Kasaneva's Compensation Compare With Similar Sized Companies?

Our data indicates that Austral Gold Limited is worth AU$40m, and total annual CEO compensation was reported as US$763k for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at . Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$259k.

Thus we can conclude that Stabro Kasaneva receives more in total compensation than the median of a group of companies in the same market, and of similar size to Austral Gold Limited. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

The graphic below shows how CEO compensation at Austral Gold has changed from year to year.

ASX:AGD CEO Compensation, November 12th 2019

Is Austral Gold Limited Growing?

Austral Gold Limited has reduced its earnings per share by an average of 90% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is down 5.5%.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Austral Gold Limited Been A Good Investment?

Since shareholders would have lost about 54% over three years, some Austral Gold Limited shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared total CEO remuneration at Austral Gold Limited with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

Earnings per share have not grown in three years, and the revenue growth fails to impress us. Over the same period, investors would have come away with nothing in the way of share price gains. This analysis suggests to us that the CEO is paid too generously! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Austral Gold (free visualization of insider trades).

If you want to buy a stock that is better than Austral Gold, this free list of high return, low debt companies is a great place to look.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.